What You Need to Know:
Leading cryptocurrency exchange, Coinbase, has announced that it will no longer allow trading of Tether (USDT), DAI, and RAI stablecoins for its Canadian users. The suspension will take effect from August 31st. However, users will still be able to deposit and withdraw these stablecoins after the deadline. This move comes as Coinbase Canada, Inc. continues to await registration in certain Canadian jurisdictions.
Background:
Cryptocurrency exchange Coinbase has revealed its decision to suspend the trading of Tether (USDT), DAI, and RAI stablecoins for Canadian users from the end of this month. In an email sent to users on August 17th, the company stated that it continuously monitors the assets available on its exchange to ensure they meet listing standards. Based on this review, trading of the mentioned stablecoins will no longer be available for Canadian users starting from September.
The Implications:
While the trading suspension may come as a disappointment for Canadian users, they will still have the ability to deposit and withdraw the affected stablecoins even after the proposed deadline. This decision is a result of Coinbase Canada, Inc. filing an application for registration in certain Canadian jurisdictions, which is still pending approval. As a result, the company has agreed to follow the terms of an undertaking until registration is obtained.
This move by Coinbase follows a similar decision made by digital asset exchange Crypto.com, which delisted USDT for Canadian users earlier this year. The ban on USDT by the Ontario Securities Commission in 2021 was not accompanied by an explanation.
New Regulations Hit the Market:
The Canadian Securities Administrators (CSA) published a notice in February that required registered or pending registration crypto exchanges to sign legally binding undertakings with the regulatory body. The undertaking includes a prohibition on allowing clients to buy or deposit Value-Referenced Crypto Assets (commonly known as stablecoins) through crypto contracts without prior written consent from the CSA.
As a result, Tether, a stablecoin backed by fiat reserves, DAI, a hybrid stablecoin, and RAI, an algorithmic stablecoin not pegged to any asset, will no longer be available for trading on Coinbase for Canadian users. The only stablecoin approved by the CSA for listing on centralized crypto exchanges is USDC (USD Coin).
Withdrawal Trend Continues:
Withdrawals from the Canadian market have become a trend among crypto exchanges due to the new regulations. OKX pulled out of Canada in June, and Binance is scheduled to do the same by September. It remains to be seen how these regulatory changes will impact the cryptocurrency landscape in the country.
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